China and Hong Kong stocks eased on Thursday as disappointing economic data and renewed trade war fears hit investor sentiment. The blue-chip CSI300 index closed down 0.4 percent at 3,773.37 points, while the Shanghai Composite Index 3,044.16 slipped 0.2 percent to 3,044.16 points.
China's economy is finally starting to cool under the weight of a multi-year crackdown on riskier lending that is pushing up borrowing costs for companies and consumers, with data on Thursday pointing to a broad slowdown in activity in May.
The country's central bank sparked concerns over the health of the economy earlier in the day when it left short-term rates unchanged, surprising markets which had expected it to follow a hike by the Federal Reserve, as it has tended to do.
"The central bank's move is a boost to sentiment, though the impact could be rather limited," said Yang Weixiao, an analyst with Founder Securities.
Investors will tread cautiously for the moment, as there are downside risks for the A-share market amid an economic slowdown, Yang said.
Investors were also kept in check amid concerns about US threats to impose tariffs of billions of dollars on Chinese goods.
Consumer and healthcare firms led the decline. China's biggest domestically listed tech company by market cap Foxconn Industrial Internet plunged 9.4 percent, after institutional investors dumped stakes.
The largest percentage gainers in the main Shanghai Composite index were Xining Special Steel Co Ltd up 10.09 percent, followed by Anyang Iron & Steel Inc gaining 10.05 percent and Jiangsu General Science Technology Co Ltd up by 10.04 percent.
The largest percentage losses in the Shanghai index were Xin Jiang Ready Health Industry Co Ltd down 10.06 percent, followed by Citic Guoan Wine Co Ltd losing 10.04 percent and CRED Holding Co Ltd down by 10.04 percent.
So far this year, the Shanghai stock index is down 7.9 percent, the CSI300 has fallen 6.4 percent while China's H-share index listed in Hong Kong is up 1.7 percent. Shanghai stocks have declined 1.65 percent this month.
About 11.55 billion shares were traded on the Shanghai exchange, roughly 88.1 percent of the market's 30-day moving average of 13.11 billion shares a day. The volume in the previous trading session was 11.96 billion.